What are the mandatory and optional benefits in Vietnam?

In Vietnam, employers are not required to provide mandatory allowances, but many companies choose to offer additional financial support to employees as part of their compensation packages. Below is an overview of the mandatory and optional allowances in Vietnam, along with common practices and limits.


Although not compulsory, many employers offer allowances to support employees and make their compensation packages more attractive. These optional allowances are divided into two main categories: non-taxable and taxable.


Non-Taxable Allowances

These allowances are exempt from personal income tax:

  • Telephone Allowance: Up to VND 100,000 per month.
  • Lunch Allowance: Up to VND 730,000 per month.


Taxable Allowances

These allowances are subject to personal income tax and include:

  • Housing Rent: Contributions to cover housing expenses.
  • Utilities: Payments for electricity, water, and related services that exceed 15% of the employee’s total taxable income.
  • Transportation Allowances: To help with commuting costs.
  • Life Insurance Premiums: Payments made toward life insurance.
  • Health Care Services: Contributions to cover medical expenses.
  • Entertainment Fees: Payments for entertainment-related activities.
  • Sports/Athletic Fees: Membership fees for clubs such as golf courses, tennis courts, and other recreational facilities.


Purpose and Benefits

  • Attracting and Retaining Talent: Optional allowances make job offers more appealing and help employers retain valuable employees.
  • Supporting Employee Well-being: These allowances can ease employees’ financial burdens, improving overall job satisfaction and productivity.

 

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